A product-led approach has traditionally been the domain of externally facing, revenue generating parts of a business but more and more the practice of product is being applied to internally facing solutions and the employee experience.
Companies like Google, Airbnb, Facebook and others pioneered the product-led approach in order to achieve their revenue and growth goals through balancing customer needs, business needs and technology. This external focus on revenue, growth, customers and users is where product management and product development were born and grew up.
So it has been an easy leap for other companies to adopt a product-led approach to their own external experiences.
But internal systems, internal experiences and the day-to-day tasks of employees have, until recently, been an afterthought in most companies.
Background: why product-led is in for internal products
Historically the approach to internal systems was to treat them as a cost centre, hand them to IT and then let IT tell the business what the business would get. People inserted agile somewhere along the way but whilst agile made things a little better there has been something missing that meant employees and internal stakeholders still felt underserved and misunderstood.
Along came the focus on employee experience. “It goes beyond simply being a great place to work; to stay ahead, companies need to offer employees a new level of support, flexibility and opportunity.” says Timely. This focus on employee experience has now hit mainstream with almost every company we come across above a certain size having dedicated employee experience teams. Some even taking this further with specialists like ‘call centre experience teams’ and ‘engineering success teams’.
With the employee’s experience in focus for organisations and the clear out-performance of product-led companies, it has meant that smart organisations have said “hey, this product-led approach really works wonders for our customers, why not apply it internally and to our employee facing aspects of our businesses?”
So, how do you take a product-led approach to internal products? In many ways it’s no different to external products but there are some differences. Here are a few considerations when it comes to internal products.
1: Get familiar with the principles of a product-led approach
If you’re going to be product-led with your internal products or an employee experience initiative then you need to start with the right foundations. The principles of a product-led approach are:
- An outside-in approach
- Rapid, early validation of new ideas
- Mature through iteration
- Disciplined prioritisation
This is easy to write but can be significantly harder to implement. Especially when you have old systems, old vendors and parts of the organisation set in old or incompatible ways of working. More on this a bit later.
2: Business Case and Metrics considerations for internal products
Most of what you read and learn about product focuses on revenue and customers but internal products often don’t have a link to revenue. This makes the business case and metrics you want to measure for an internally focused product slightly different to an external product.
Here are a few considerations:
- Find a way to link it to revenue – if you can, involve revenue. As a general rule, anything revenue related with a positive ROI is a straight forward approval that is easy to muster support for. If this means slightly adapting your feature set or bending your scope a bit then it is worth thinking about. Often this is a stretch though. Don’t make a link if it isn’t there.
- Give concrete cost savings – the easiest set of metrics to define success around will be cost related for an internal product. Look to these from the outset. But…
- Try to avoid wages savings unless you plan to fire people – the systemic issue with internal product justifications is that they focus on cost, and focus on costs saved because you saved a few hours a day or week. This isn’t a real cost saving unless the people are fired. If the people are still doing their work then in some ways the businesses costs are not reduced – those people need to be employed and your solution is needed to be maintained. You’ve actually increased real costs. So…
- Find a benefit metric as well as cost saving metrics – look for metrics around benefits, especially benefits that are almost inaccessible without major cost increases. Like ‘we will be able to process 1,000 quotes instead of 25 per week with the same people’.
- Avoid tenuous links to revenue and other metrics – don’t draw links that aren’t there as it will reduce confidence in your business case.
- Include employee pain – strong stories about the pain employees and executives are experiencing that your product can solve can add serious weight to a business case. Pro tip: getting it on video has unexpectedly good results.
- Include employee experience – use measures like NPS or something more specific for your product to measure how much better an employee’s experience on an emotional level is as a result of your product. Good emotional state = good productivity.
3: Internal products rely on relationships
At the end of the day, an internal product can succeed or fail based on the backing of a key executive. This is why you want to include employee pain in the business case and why you need to put time into relationships.
Many internal products come to life because the right people were engaged at the right times in the product life cycle.
Get executive pain in there if you can.
4: Change prioritisation based on relationships
Given the importance of relationships with internal products you want to become more flexible with your prioritisation frameworks. You want to choose techniques that will best engage your stakeholders. You may even want to consider changing prioritisation techniques over the course of the product life cycle to suit different stakeholders or types of stakeholders.
Some great prioritisation frameworks for internal products are:
- Buy a feature
- RICE
Happy internal product building.